From an accounting point of view, according to the accounting regulations adopted by OMFP 1802/2014 (point 432 – 432^3), the travel agency acts as an intermediary in the name and on behalf of its client (the tourist), the income realized by the agency being the commission (or the difference between the entry price and the selling price of the tourist service) invoiced to its client.
With regard to VAT, the special regime regulated in Article 311 of the Tax Code stipulates that:
For the purposes of this Article, a travel agent means any person who, in his own name or as an agent, mediates, provides information or undertakes to provide travel services to individual or group travellers, including hotel accommodation, guest houses, hostels, holiday homes and other premises used for accommodation, air, land or sea transport, organised tours and other tourist services. Travel agencies include tour operators.
Where a travel agency acts in its own name for the direct benefit of the traveller and uses supplies of goods and services made by other persons, all operations carried out by the travel agency in connection with the journey are considered a single service provided by the agency for the benefit of the traveller. The single service is provided in Romania, if the travel agency is established or has a fixed establishment in Romania and the service is provided through the establishment in Romania.
The taxable amount of the single service is the profit margin, excluding tax, which is determined as the difference between the total amount to be paid by the traveller, excluding tax, and the travel agency’s costs, including tax, relating to supplies of goods and services for the direct benefit of the traveller, if these supplies are made by other taxable persons.
If the supplies of goods and services for the direct benefit of the customer are made outside the European Union, the single service of the travel agency is considered to be a service provided by an intermediary and is exempt from tax. Where the supplies of goods and services made for the direct benefit of the customer are made both within and outside the European Union, only the part of the single service provided by the travel agent relating to operations carried out outside the European Union shall be considered exempt from tax.
According to point 85, paragraph (6) of the methodological rules given in application of Article 311, paragraph (6) of the Tax Code:
For the purposes of Article 311 of the Tax Code, the traveller may be a taxable person, a non-taxable legal person and any other non-taxable person.
The special scheme does not apply to services provided by the travel agency exclusively with its own means.
In order to determine the amount of tax collected for single services carried out in a tax period, travel agencies”:
a) keep sales journals or, as the case may be, receipts slips, in which they record the documents of sale to the client, including tax, of services subject to the special regime provided for in Article 311 of the Fiscal Code, relating to a fiscal period. These journals, i.e. slips, shall be kept separately from the operations for which the normal tax regime applies;
b) keep separate purchase journals in which the purchases of goods and/or services included in the costs of the single service are recorded;
c) on the basis of the information in the sales and purchase journals, determine the tax base for the single services rendered in a tax period in accordance with the provisions of Article 311(4) of the Tax Code. When determining the taxable base, no account is taken of amounts received in advance for which the related expenses cannot be determined, nor can expenses related to supplies of goods or services not sold to the customer be deducted;
d) calculates the amount of tax collected at the standard rate of tax by applying the increased hundredth method, i.e. 20 x 100/120 in 2016 and 19 x 100/119 as of 1 January 2017, except in the case where the tax exemption provided for in Article 311, paragraph (5) of the Tax Code is applied from the difference between the amount provided for in paragraph (3)(a) and the amount provided for in paragraph (3)(b).
Travel agents act as intermediaries, according to Article 311, paragraph (9) of the Tax Code, for the services referred to in Article 311, paragraph (5) of the Tax Code, as well as when acting in the name and on behalf of another person, according to Article 271, paragraph (3), letter e) of the Tax Code and point 8, paragraph (5). For example, the travel agent acts as an intermediary when it mediates medical insurance operations for travellers and these are not sold together with other tourist services.
Travel agencies are obliged to apply the special regime provided for in Article 311 of the Tax Code also when the single service comprises a single supply of services, with the exception provided for in paragraph (2) and unless they opt for the normal tax regime within the limits of Article 311, paragraph (10) of the Tax Code.
In this respect, the European Court of Justice has ruled in Case C-163/91 Van Ginkel.
However, for passenger transport, the travel agency may apply the normal tax regime, except when the transport is sold together with other tourist services.
Therefore, under the margin scheme only the standard VAT rate, currently 19%, is used.
For operations for which the agency chooses to apply the standard VAT regime, the tax rates used will be those corresponding to each service provided, as follows from paragraph (11) of Article 311 of the Fiscal Code: “When the travel agency applies the standard tax regime, it will invoice each component of the single service at the tax rate corresponding to each component. In addition, the tax base of each component invoiced under the normal tax regime shall include the profit margin of the travel agency.”
Legal basis:
– MFP Order no. 1802/2014 for the approval of the Accounting Regulations on individual annual financial statements and consolidated annual financial statements;
– Fiscal Code (approved by Law no. 227/2015, published in the Official Gazette no. 688 of 10.09.2015), as amended and supplemented.
From an accounting point of view, according to the accounting regulations adopted by OMFP 1802/2014 (point 432 – 432^3), the travel agency acts as an intermediary in the name and on behalf of its client (the tourist), the income realized by the agency being the commission (or the difference between the entry price and the selling price of the tourist service) invoiced to its client.